Challenges in Ship Management Roberto Giorgi, President, V.Ships by rrr96984

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                                                 2ND ANNUAL
                                     INVEST IN INTERNATIONALSHIPPING
                                                20 March 2008
                                                  New York

Challenges in Ship Management
Roberto Giorgi, President, V.Ships
Challenges in Ship Management


  ! What is Ship Management?

  ! Outsourced Ship Management Market

  ! Why Listed Owners Outsource Ship Management

  ! Past / Present Publicly Listed Clients

  ! Shipping Industry Challenges…Five Cs

  ! Mitigating the Five Cs…Our Approach

  ! In summary…

March 2008
What is Ship Management?
  Ship Management
  ! Is the shore-based and shipboard management of day-to-day operations of a ship

  ! Can include
     " Crewing
     " Technical management
     " Commercial management
     " Bunkering
     " Dry-docking
     " Accounting

  Outsourced Ship Management
  ! Shifts responsibility for all the above to a third-party specialist
  ! Enables asset-owner to focus on core strategy

March 2008
Outsourced Ship Management Market

                                                     Principal Suppliers
                                                     " V.Ships
                                                     " Schulte Group
                                                     " Wallem
                                                     " Anglo Eastern
                                                     " Wilhemsen
                                                     " Fleet
                                                     " Thome
             42,500                                  " Columbia
                                                     " Univan
                                                     " Executive

         Vessels > 500 GRT trading internationally

March 2008
Why Listed Owners Outsource Ship Management

   ! Greater access to crew at a time of growing shortage

   ! Eases investor concerns
      " Smoothes IPO vetting process, widens access to public equity and debt
      " Best-practice fleet operation
      " Avoidance of conflict of interest

   ! Strong track record & reputation of ship manager
      " Facilitate oil major vettings
      " Help promote good relationships with regulatory authorities

   ! More flexible financial options
      " Lenders often require professional third-party ship management
      " Easier to divest / invest

   ! Better overall risk management
      " Arms-length relationship
      " Speedier remedies

   ! Easier for ship owner to focus on core business and revenue generation

March 2008
Past / Present Publicly Listed Clients

              Carnival    Knightsbridge   Premuda

               DFDS         Majestic       SBM

             Eagle Bulk       MISC        Stealth

               Eitzen         NAT         Svithoid

               Essar         Omega          Top

             Frontline                    Tsakos

March 2008
Shipping Industry Challenges…Five Cs

  ! CREW shortages

  ! Inflationary COSTS

  ! Regulatory COMPLIANCE



March 2008
Mitigating the Five Cs…Our Approach
    Crew Shortages

 ! Unrivaled access through global manpower supply office network in key crewing

 ! Strategic sourcing using both established and new supply areas

 ! Career development…a job for life…improves retention

 ! Major investment in training programmes including computer-based and

 ! More than 1,000 cadets

March 2008
Mitigating the Five Cs…Our Approach
    Inflationary Costs

  ! Many causes
     " US$ weakness
     " Wage spiral due to crew and shore staff shortage
     " Cost of compliance

  ! Smart procurement
     " Inherent scale economies because of our size
     " MARCAS contracting power
     " Easier access to leading specialty service providers

March 2008
Mitigating the Five Cs…Our Approach
    Regulatory Compliance

  ! Regulations increasing in number and complexity
     " Requires ongoing training and re-qualification

  ! Penalties for non-compliance severe—not limited to crew

  ! We promote / invest in a compliance culture ashore and at sea
     " Aim to exceed what is required by law

  ! Major investment in compliance training

  ! Intertanko basing tanker industry training standard on V.Ships model

  ! V.Ships LNG training was first to be accredited to SIGTTO standard by Nautical

March 2008
Mitigating the Five Cs…Our Approach
    Fuel Consumption

  ! Multifaceted challenge
     " Rising costs
     " Environmental regulations

  ! V.Ships / V.Group initiatives
     " Bunker supply scale economies
     " UMC’s mini-pamper hull cleaner enhances performance, saves fuel
     " V.Delta’s cold ironing feasibility study expanded knowledge base for eventual
       implementation in the Mediterranean

March 2008
Mitigating the Five Cs…Our Approach
    Seafarer Criminalization

 ! Growing and troubling trend in some areas

 ! A key reason for crew shortages

 ! Factual-based lobbying

 ! Hebei Spirit
    " Today’s most prominent example also presents unique opportunity
    " Master and chief officer being unfairly detained and tried
    " V.Ships / owner mounting major campaign to gain public support
    " Also signals our crew worldwide that we support them

March 2008
In Summary…

  ! A range of options, each with pros and cons
     " In-house ship management
     " Outsourced ship management
     " Fully outsourced ship management
     " Partially outsourced ship management, ie, crewing

  ! Whichever option you choose
     " Consider the challenges
     " Those we have discussed
     " Those yet to come
     " They won’t diminish!

March 2008
   Thank You!

March 2008

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